Browsing: realtor

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Any real estate investor knows that having a strong real estate team is an essential part of the business. You need your attorney, accountant, title officer, lender and real estate agent. The last two are probably the most important. Today we’ll talk about selecting an agent.

Ely, NevadaIn a city or a large town it’s fairly easy. You probably have hundreds of agents to choose from and you just keep going until you select one that meets your needs.  Choosing someone to work with in a very small town is a horse of a different color. You may need to choose from a very small number and it’s possible that none of them will seem to fit the bill. I was recently faced with having to make that choice myself when it was time to list a property.

Defining the Parameters

Most of my properties are in the small mining town of Ely in northeastern Nevada. It is actually a very good real estate market with a strong demand for rentals. When I first started rehabbing there several years ago I had the opportunity to work with a truly outstanding agent. She knew the market and understood rehabbing and investment. Unfortunately after watching me make a lot more money than she did, she decided to go into rehabbing with her contractor husband and she left the business.

When she left I started working with the first agent’s associate. That worked out well until that agent left the area because of her husband’s job transfer. It was back to the drawing board for me. I defined what I was looking for in an agent and began my search.

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A Great Web-Based Tool for Marketing your Real Estate Listings

When selling real estate in a buyers’ market of today, the more comprehensive your listing information is, the better. Whether you are a Realtor or an investor, payday comes once the property is sold, therefore it’s best that you do all you can to reduce it’s days-on-market. More is better when it comes to marketing!

FloorPlanner floor plans for marketing listingsA great tool that’s available can be found at FloorPlanner.com, an online application that allows you to create 2D and 3D floor plans complete with textures, floor types, furniture, etc. So, for an out-of-state, foreign or even a local client, the addition of such a rich media component to your property’s marketing package may help seal the deal.

The tool is very intuitive and the floor plans can be made to scale. You can drag-drop a door here, add a garage door there, input the measurements and before you know it you’ll have a complete plan that is visible in 2D and 3D.

(more . . . )

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Every once in a while I catch an episode of Flip this House; I have to admit, it is entertaining and it does show the drama involved in fixing up a home. However, I am very amused when they show the final numbers. I have watched episodes where a first time rehabber has bumbled and stumbled through the process and yet still manages to make a profit in the end, according to the show. This and other shows might make one believe that a flip is a sure bet. When they do the numbers they normally list the Purchase price, the fix up costs, and the sales price. Wow, are they missing a bunch of stuff.

Please take my advice: Do NOT start that flip if those are the only categories of expenses that you are anticipating.

The REAL Costs of Flipping a House

Here are the actual costs of one of my recent flips.

real costs to flip a housePurchase Price:
Contract Prices: $213,000
Wholesaler: $12,937
Total Price: $225,937

*This deal was brought to me by a wholesaler. So my purchase price consisted of both the amount that I paid the owner (in this case a bank) and the finder’s fee that I paid the wholesaler.

Costs of Money:
3 Points: $7,312.50
Broker Fee: $2,437.50
Holding Costs: $9,500.00
Lender’s Lawyer: $1,220.00
Total Costs: $20,470.00

The cost of money or the cost of capital to me is everything that the lender charges for the use of his money. Note that in this case (which is pretty standard) I paid the lender 3 points and I paid the broker 1 point. Note that there is also a lawyer; this lawyer is not the title company. This is the lenders lawyer who writes up the contracts and the deed. He’s the one who does his very best to shackle me to ensure his client gets his money back. The lawyer represents me in no way at all, but I get the privilege of paying for his services. Most hard money lenders will either have this fee or some sort of administrative fee of about the same price.

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This past week, my Re/Max broker gave me an award congratulating me for having the 9th most sales in the region. In order to achieve this, I had to sell over a million dollars in real estate in each of the last two months. And I can tell you… you have to sell a lot of condos at $30,000 to sell over a million dollars in real estate. This got me thinking a little bit about what am I doing right. I asked myself, “What am I doing that has afforded me the ability to sell so much real estate in what some call the worst housing market in our nation’s history? What do I perhaps do differently than the average Realtor, that enables me to do a lot more business?

Thinking Like An Investor

The first thing I do, is that I think like an investor, not like a Realtor. I understand what the investor wants and I find it for him. Savvy investors in today’s market want good, new houses or condos at the lowest price possible, with the highest cash flow, and the greatest appreciation potential. More than ever, investors know what they want and they are able to make a good, fast decision about buying it provided you get them the necessary information in an expeditious manor. In today’s market you have to be ready to pull the trigger immediately if you see a good investment property. The key is to train both your investor clients and your owner occupants to be as aggressive as you need them to be in order to get the deal under contract and closed.

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Paradise, Nevada
Image via Wikipedia

Last week, in my first post on the BiggerPockets Blog, I wrote about how I became the investors’ Realtor by being an investor myself, thinking like an investor, having marketing materials designed for investors, and being in the hottest spots for investor real estate purchases.  This week I would like to expand on the idea of traveling to the investment hot spots.  Being in the places where people actually want to buy, and are buying, will enhance your chances of becoming a leader in your field.  Specializing in a niche within a niche will also help establish your reputation as a leader in your area of expertise.

As you recall from our last article, I was heavily involved in several real estate markets over the 2003 to 2006 period. Where ever the hottest market… I was there. I was in Las Vegas, Phoenix, Albuquerque, and North Carolina just to name a few. I stayed tuned-in to where investors were heading, as I was one of them, and invested in all of these markets myself. Since the summer of 2008 I have specialized once again in the Las Vegas valley, but this time it has been foreclosures and REO properties… not new construction homes. I knew it was time to gear myself back up for sales in the Las Vegas area as I watched the prices of single family homes and condos drop rapidly due to the glut of foreclosures flooding the market. These lower prices created homes that could be purchased and rented for very good cash flow… better than Vegas has seen in decades. I took the opportunity to begin educating myself about this niche in this market, develop my marketing materials, and get ready to welcome the investors that I knew would soon come running into the Las Vegas housing market once again.

Becoming An Expert

I cannot stress enough how important it is to identify a niche and establish yourself as an expert in that particular area.

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It is no secret that real estate agents, as a profession, have had a tough time of it over the last several years.  The recent real estate bubble created a feast or famine situation and many agents have not survived the famine.  Meanwhile, over the last 5 years, I have sold over 500 single family homes, condos, or lots to my clients…including closing on 30 deals last month alone.  This volume places me in the top 5% of all Realtors in the country (in both transactions and commissions.)  I am not telling you this in order to boast or brag about my sales (as I know other realtors who have done far more business than I have) but merely to propose that my success has not been due to luck but rather due to a particular mindset that has worked very well for me over the last several years.

The Realtor’s Success Mindset

This mindset has entailed thinking as an investor instead of as a Realtor.  I have never really considered myself a Realtor, in fact, but rather an investor who helps other investors.  It doesn’t hurt that I own 20 investment properties of my own and have a lot of experience in searching for and closing my own purchases.  But this is not a prerequisite to thinking like an investor.  In order to position yourself as an  investor Realtor you don’t have to own a lot of properties yourself, but you do have to develop a reputation with your clients for being more interested in their bottom line than you are in your commission.  I have been able to do this, and in so doing grow a large investor database by using the following strategies that I would like to share with you: